Administrative Restructuring and federalism
1. Public Administration forManaging State Affairs:
Federalism being a system to distribute state power between centre and sub- national units with constitutionally defined political structures and
powers has lots to shape how state affairs are administered in a country. Not any hard and fast rule exists to follow in designing the mode of
public administration in federal context, but how such administration is designed and practiced tends to have been influenced with variance by
how power is distributed between central and sub-national governments in countries which adopt different modalities differing in the level of
prominence of central and sub-national governments (e.g., USA, Switzerland, India and others). As a matter of fact, public administration itself,
which always matters in operationalizing the federalism depending upon the contextual needs of the country, has gone through its evolutionary
development process irrespective the types of state structure like unitary and federal).
The concept of New Public Management (NPM), once popular in the 1990s as the new paradigm of Public Administration and Management
(PAM) has actually been a transitory stage in the evolution from traditional PA to the New Public Governance (NPG). The NPG has the
potential to provide a framework both to generate of new PAM theory and to support the analysis and evaluation of public policy evolution.
Highlights of some basic elements of the NPG in contrast to PA and NPM are presented in Annex 1 of this paper. Since the basic features of
NPG (in terms of focus, emphasis, external relationships, mechanism and value base) are less likely to differ across unitary and federal system of
governance, the new shifts in paradigm of public administration can be useful reference in many ways in restructuring administration in a
country, like Nepal too.
2. Federalization and Administrative Restructuring in Nepal
2.1 Emergent context:
Nepal has gone through historic changes in recent years in many areas, mainly in political front having implications in other fronts like socio-
cultural, economic and administrative. In the past, political changes are hardly followed by prerequisite restructuring and strengthening of public
administration and civil service – which is viewed mainly as centralized subordinate system of political masters without public accountability.
Public administration, including civil service, has to be continuously strengthened and prepared to meet the needs of state reforms. In the present
Nepalese context, administrative restructuring and strengthening have to go through a transformation process since the thrusts of on-going state
reforms as envisaged by the new constitutionare not only on “federalism” but also “inclusiveness” and “federalism” – the two major facets of the
recent political change in the country.
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With the promulgation of the new constitutionlast year, Nepal is constitutionally a federal democratic republican state. As one of its major
features, the Constitution envisages three tiers of governments at central, provincial and local with provision of seven provinces while the
number of local governments is left to be ascertained by a separate commission (now formed).Rural and urban municipalities are defined as local
governments. All three tiers of governments are constitutionally assigned exclusive powers along with concurrent powers to be exercised jointly by the
federal and provincial governments as well as by federal, provincial and local governments. T he sub-national governments have got constitutional status
with constitutionally defined political structures and powers. Likewise,parliamentary form of government has been adopted at both federal and
provincial levels with bi-cameral legislature at the federal and uni-cameral one at the provincial level.
The new constitutional provisions provide a broad framework for determining how all three branches of the state affairs, i.e., legislative,
executive and judiciary, are to be organized and operated. For the first time in Nepal, provincial and local governments will be exercising
legislative powers will be exercised at province and local levels as the sub-national governments. For this, many of the existing laws shall have
to be repelled or aligned and amended while more than one hundred new laws shall have to be legislated by the federal government to meet the
constitutional requirements. Comparatively, the judiciary is expected to be the least affected by the new constitutional arrangement since
continuity is given to its existing three-tier institutional set-up like Supreme Court, High Court and District Court, replacing the existing
appellate by high court (Article 127).
2.2Administrative Implications of Major Constitutional Provisions
It is mainly the executive part of the state that will need to undergo transformation in terms of both reframing and strengthening of public
administration in response to the political rearrangements and division of powers to different tiers of government as envisaged in the new
constitution. Specifically, some important implications of new constitution on public administration can be cited as follows.
a) Provisions of fundamental rights: As many as 31 fundamental rights embracing all political and socio-economic lives of citizens are
provisioned in the constitution (Article 16-46). All these will require various institutional arrangements in three branches of the state affairs,
which should range from legal provision (Article 47) to policy, organizational and resource provisions.
b) Directive principles and state policies: The constitution has enshrined 13 state policies covering all important aspects of state affairs,
including political and governance systems, besides setting well-elaborated directive principles(Article 50 and 51). It has guaranteed good
governance ensuring people's equal and easy access to services and privileges offered by the state by making public administration clean,
efficient, impartial, transparent, corruption-free, accountable to people and participative (Article 51b-6). All these principles and policies
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require adequate institutional arrangements, e.g., standards, organization set-ups, resource management, monitoring and correcting
measures, etc. for complying and translating them into actions.
c) Transformation from unitary to federal system: In view of the new constitutional provisionsof federal system having three tiers of the
government at centre, province and local levels (municipal and village), along with the provision of special structure (Article 56), the
legislative arrangements are likely to be very complex. Such arrangements will have to be made considering the five lists of powers of three
tiers of government (Article 57), i.e., three exclusive lists (Schedule 5, 6, 7) one Federal-provincial concurrent list (Schedule 8), and one
Federal-provincial-local concurrent list (Schedule 9) and the level of their vertical interconnectedness.The transformation process should
also adopt “Cooperation” as the organizing principle of federalism.
d) Defining, establishing and practicing horizontal and vertical coordination mechanism: With establishment of different tiers of the
government, there is a need to allocate authorities, responsibilities and resources across different levels of government, with institutional
mechanisms for interrelationship between Federal, Provincial and Local Levels (Article 231 to 237) and National Natural Resources and
Finance Commission (Articles 50 and 251).
e) Changes in size and composition of public organizations and employees: There is need for creating many new organizations simultaneously
with re-arrangements of the existing ones at different levels of government in the process of administrative federalization. This will require
not only a new set of organizations and employees to be put in place at the sub-national levels to carry out the functions assigned to them but
also development of new working systems, standards and procedures.
f) Number of civil services: Different types of services are provisioned for federal, provincial and local level governments (Article 285). Even
at central level, unlike in the unitary civil service, different services to be labeled as "federal civil service" and “other federal government
services" will need to be created and managed for administrative federalization (Article 285).The constitution, operation and conditions of
such services shall be as provided for in the Federal Act. Likewise, positions in the Federal civil service as well as all Federal Government
services shall be filled through competitive examinations on the basis of open and proportional inclusive principle. Likewise, as provisioned
in the constitution, the Provincial Council of Ministers, Village Executives and Municipal Executives may by law constitute and operate
various government services as required for the operation of their administration.
The constitution has also provisions the remuneration, facilities and conditions of service of the employees of the Federal Judicial Service
shall be as provided for in the Federal Act (Article 155). There are also provisions relating to the remuneration, facilities and conditions of
service of the government attorneys and other employees under the Attorney General shall be as provided for in the Federal Act (Article
161).
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All these will require creation of new basic laws and changes in the existing ones and other suitable institutional arrangements at both
central and sub-national government levels. In view of the need for administering various types of government services, a comprehensive
civil service policy as well as an umbrella Act will also be required for uniformity in organizing and administering national civil service.
g) Provision for constitutional bodies: More than a dozenconstitutional bodies are provisioned to look after different issues like accountability
and oversight, election, inclusion and human rights (Article 239-265). All these will be federal bodies, with exception of the Public Service
Commission (PSC).
The mandate of PSChas expanded to conduct selection tests for recommending the suitability of candidates for various public services,
besides civil service (Article 243). There are several provisions regarding the consultation with the Public Service Commission in relation to
recruitment and selection of civil employee in the country, including the matters concerning the law relating to the conditions of service of
the Federal Civil Service; the principles to be followed in making appointments to, promotions to, the Federal Civil Service or positions
thereof and taking departmental action; suitability of any candidate for appointment to the Federal Civil Service position for a period of
more than six months; suitability of any candidate for transfer or promotion; departmental action against any employee of the Federal Civil
Service and so on. This will require government to develop accountable and transparent administrative process in dealing with main
functions relating to administration of public servants. There is also a provision of Provincial PSCs (Article 244), whose functions, duties
and powers shall be as provided for in the State law. All thesewill require PSC to undergo rigorous process of setting basic principles and
laws and restructuring work that can address demands of both federalism and state policies and commitments related to human rights and
good governance.
h) Intergovernmental transfer: Provisions are made for both exclusive and concurrent revenue assignments at all three tiers of government.
The central government will have to transfer many of powers and resources to the sub-national governments and likewise many ministries
are likely to be reorganized with the potential reduction in their existing number. Likewise, creation of Natural Resource and Fiscal
Commission too is envisaged in the constitution (Article 250), which might have influence in how structures and systems of public fiscal
administration are designed and practiced in the country.
i) Drafting of laws: Since both provincial and local governments, besides federal one, also will be exercising legislative powers as the sub-
national governments, many of the existing laws shall have to be repelled or amended while more than one hundred new laws shall have to
be legislated by the federal government to meet the constitutional requirements. The government has to expedite the process of enactment of
138 new laws and amendments of large number of present laws as identified by the technical team.
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j) Services and staffing during transition:The government is to make necessary provisions, as part of transition management, to deliver
services at provincial and local levels without disrupting what it has been doing now. For this, it will have to adjust public servants, who are
in government service at the time of promulgation of the new constitution, to the federal, province and local levels in accordance with the
law (Article 302).
Federalization of the state and its administration is to take place with decentralization principles. In view of its history of decentralization reform,
Nepal has a long way to go to materialize the administrative federalization at central, provincial and local levels. Therefore,the t ransition into
federal form of the state tends to be very challenging and complex one as it requires lots of preparations at both political and administrative
levels in view of the features of both prevailing administrative setup and new constitutional provisions.
2.3 Challenges of Administrative Restructuring in the Federal Context and Transition Management:
Nepal's public administration will need to undergo through significant transitions, particularly at the level of sub-national governments, in terms
of basic structures and functions of parliamentary, executive and judiciary. Specifically, the challenges to management of transition from the
unitary form of government to the federalized and decentralized form of governance from the perspective of administrative restructuring can be
summarized as follows:
a) Though central government has existed as backbone of the unitary system, the central government in federal structure will not or cannot
continue to exist and function in the way it did in the unitary set-up. The government is to make necessary provisions, as part of transition
management, to deliver services at provincial and local levels without disrupting what it has been doing now. It will have to adjust public
servants, who are in government service at the time of promulgation of the new constitution, to the federal, province and local levels in
accordance with the law. Likewise, it will have to take lead in making required institutional arrangements, including organizations,
operating mechanism, resources and legal provisions, etc. with a comprehensive transitional management plan (road map).
b) The province level set-up, being completely new one, is likely to pose various issues of sharing of authorities and resources with both
central and local level governments. It will demand a well-thought out action plan for replacing or making new adjustments in the earlier
institutional arrangements at regional, zonal and district levels, which existed for long period as integral parts of Nepal’s political and
administrative set-ups, without causing disruption in deliveryof services to people. There is a long way in making the newly created
provinces functional politically, fiscally and administratively as one major feature of federal state;
c) Like the central government, local bodies designed to operate as local government have existed since long in Nepal’s administrative
structure in various forms and names, but these too will not continue to exist and operate in new federal structure in the way they did in the
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past. Lots of precautions and preparations are needed for restructuring the existing local institutional set-up as viable units of local
governments, both municipalities and village bodies, with focus on village bodies in new modalities.
d) Though the constitution does not recognize “District” as a different tier of sub-national government, its existence is allowed to continue. It
remains to be decided and seen whether the existing organizational arrangements at district level would be completely eliminatedor remain
in new forms as extension of provincial government or a kind of federation or integrator or supervisory agency of local government units at
district level.
e) It seems to be wide-spread apprehension there might be some competing interests in sharing many of the powers and resources from the
federal government to sub-national governments simultaneously. This will also require re-orientation in spirit of the constitutional
provisions, with coordinating mechanism, so that the efforts towards creating institutional arrangements through administrative restructuring
would not be affected.
